VIRC - Virco Faces More Headwinds In The 2024 Bid Season All Eyes On Q1 2025 Backlogs

2024-05-08 23:13:30 ET

Summary

• Virco Manufacturing has experienced record-breaking revenue and profit growth in FY24, leading to a 150% increase in stock price since February 2023.
• The company's backlog has been decreasing for three quarters, indicating potential trouble ahead.
• Demand side tailwinds, such as funding from the ESSER program, may be challenged as school districts return to pre-pandemic expenses.

Virco Manufacturing ( VIRC ) is a US manufacturer of school furniture.

I have been covering Virco with a consistent Hold rating since February 2023 . At the time, I believed Virco's spectacular earnings growth might not be sustainable. The reason was that the supply chain disruptions that made Chinese competition uncompetitive would eventually recede. Since then, revenues have continued to grow, pushed by record backlogs, and earnings have tripled thanks to operational leverage. The stock is up 150% since February 2023....

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